I tried around doing many ways to achieve the best or at least better video quality when I convert HDV footage to DVD video, but the regular preset in the Compressor 2 software does not work well, since it is seems to be setup for SD video to DVD video. Converting from HDV to DVD video seems to incorporate with resizing and restructuring the interlace signal (since all of my footage is shot with 1080i/60), that probably requires using the "frame control" feature in the Compressor 2 software.
I had looked for thorough documentation of the frame control function, but it is not available yet.

Since it is a really time consuming test because the procedure has to go through the long encoding period, for the time being, I thought of converting HDV footage to uncompressed SD first, then SD to DVD video (mpeg2) at the end. This worked well, so I posted the notes on doing this at my site if anybody is interested.